Netflix Inc (NASDAQ:NFLX) stock surges 11.95% (As on January 24, 11:21:49 AM UTC-4, Source: Google Finance) after the company reported adding 13.1 million subscribers during the fourth quarter, stronger growth than Wall Street expected as the streamer builds its ad-supported service and cracks down on password sharing. Netflix now has 260.8 million paid subscribers, a new record for the service. The subscriber growth easily tops the 8.76 million paid membership adds Netflix reported in the third quarter. The company also blew past Wall Street’s fourth-quarter expectations of 8 million to 9 million. Netflix reported fourth-quarter net income of $937.8 million versus $55.3 million, in the prior-year period. Total memberships has come to 260.8 million vs. 256 million expected, according to Street Account. Viewers flocked to watch scripted series such as The Crown and unscripted fare such as Beckham, helping to raise the company’s total number of global subscribers by 13 per cent.

NFLX in the fourth quarter of FY 23 has reported the adjusted earnings per share of $2.11, missing the analysts’ estimates for the adjusted earnings per share of $2.22 expected by LSEG, formerly known as Refinitiv. The company had reported the adjusted revenue of $8.83 billion in the fourth quarter of FY 23, beating the analysts’ estimates for revenue of $8.72 billion. Netflix is still navigating its transformation from targeting subscriber growth to focusing on profit, using price hikes, password crackdowns and ad-supported tiers to boost revenue. Netflix said its operating income soared to $1.5bn in the quarter from $550mn a year earlier, thanks to higher revenue and “lower than planned” spending. The streaming pioneer ended the year with 12.5 per cent revenue growth — a strong rebound from 2022 when it experienced subscriber losses that shook investor confidence in the streaming business model.

As Netflix focuses on improving profits, the company increased its 2024 full-year operating margin forecast to 24%, up from a range of 22% to 23%. It cited the weakening of the U.S. dollar and a stronger-than-forecast fourth-quarter performance. The company forecast “healthy double-digit” revenue growth for the full year. The company also projects earnings per share of $4.49 for the fiscal first quarter of 2024, higher than the $4.10 Wall Street had expected. Netflix said it planned to build out its advertising business this year and would work to improve the quality of its film and series offerings.